NBN backflip: Not as many winners as you’d think

The Morrison government has announced a $4.5 billion plan to upgrade the NBN.

The Morrison government has announced a $4.5 billion plan to upgrade the NBN.

Despite the hype around the Morrison government’s fibre-to-the-premises announcement, NBN’s own plans show just 400,000 connections are expected to be upgraded by 2025.

While these amped-up connections will be installed free-of-charge, those seeking upgrades will be required to shell out for NBN plans that are unaffordable for many households.

Communications Minister Paul Fletcher performed what the Opposition called a “humiliating backflip” on Wednesday, announcing the government would roll out fibre ‘on demand’ to the 40 per cent of households stuck on outdated fibre-to-the-node (FTTN) technology.

“So we’ll roll the fibre down the street, but then the fibre lead into the home will only be built when there’s a customer order,” Mr Fletcher said.

Despite claims that six million premises could access speeds of up-to-a-gigabit under the $4.5 billion upgrade proposal, NBN Co’s own corporate plan, also released on Wednesday, shows just 400,000 premises are expected to be upgraded to FTTP by 2025.

The Morrison government’s upgrade plan will worsen Australia’s growing “digital divide” and create a situation of fibre haves and have nots, RMIT associate professor in network engineering Mark Gregory said.

Under the new plan, households with FTTN connections incapable of achieving optimal speeds can request an upgrade to FTTP – but only if they commit to signing up for higher speed NBN plans.

These plans cost more than $100 a month – making them unaffordable for up to 50 per cent of households, Dr Gregory said.

“They’re saying it’s going to be ‘demand drop’ [in which existing services are upgraded upon request], like it has been in New Zealand and the UK,” he said.

“The difference is that the cost of broadband plans here is about $20 more expensive because of cost blowouts. The prices are high.”

NBN customers in multi-dwelling units and regional areas will likely be excluded from fibre upgrades altogether, Dr Gregory said.

In May, NBN Co launched a new “Home Ultrafast” plan for residential broadband customers, which offers maximum download speeds ranging from 500Mbps to 1000Mbps depending on the strength of connection.

Only 18 per cent of NBN users currently have connections capable of facilitating the speeds, but that number will rise to 75 per cent following upgrades according to Mr Fletcher.

The multi-technology-mix NBN

In 2013, the Coalition government ditched Labor’s 2008 plan for a network of 93 per cent FTTP by 2021 at an estimated cost of $43 billion in favour of a “multi-technology mix” (MTM) network comprising seven different types of connections of varying quality.

The decision to use copper-based FTTN connections across much of the network has been especially controversial, with telco experts warning this technology is “not fit for purpose” in 2020.

So poor are many of these connections that telcos including Telstra have stopped offering high-speed NBN plans to FTTN customers.

Mr Fletcher defended the Coalition’s decision to spend the past seven years rolling out FTTN instead of FTTP, claiming that it had resulted in “a more rapid rollout” at “less than half” the cost of Labor’s plan.

“We are committing to more fibre when it makes economic sense to do so,” Mr Fletcher told the National Press Club. 

The cost of the Coalition government’s yet-to-be-completed NBN has blown out to more than $51 billion, and rising.

‘Seven years of lost opportunity’: Rudd

Labor slammed the Morrison government’s backflip, and doubled down on the original plan for a majority FTTP network.

Former prime minister Kevin Rudd, who was at the helm when work began on the NBN, said the Coalition’s embrace of fibre came seven years too late.

“This is a monumental policy backflip by the Morrison government, which has spent seven long years attacking my government’s original plan, only now, seven years later, to begin delivering to Australians what they should have had all along,” Mr Rudd told the ABC.

“So, Mr Morrison deserves no credit whatsoever for this. It is seven years of lost opportunity for Australia.”

Labor communications spokeswoman Michelle Rowland said the government’s NBN plan was “the most extraordinary, wasteful, humiliating backflip in public policy in a generation”.

“For over seven years, the Liberals have been telling us that Labor’s vision of an NBN, that our delivery of a fibre-based model to Australians in order to meet their needs as consumers, as businesses, as students, was not achievable,” Ms Rowland said.

“This government promised that its second-rate NBN would be delivered
by 2016, that it would cost $29 billion and that it would be higher quality than what Labor would deliver. They have been proven wrong on every single count.

“We still have over 100,000 premises that cannot access minimum speeds.”

Topics: NBN
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